Penney begins selling disputed Martha Stewart-designed goods

NEW YORK – J.C. Penney Co Inc isn't waiting for a final court decision.

The retailer has begun to sell the Martha Stewart "JCP Everyday" line of home goods, even while a court battle with Macy's continues over the domestic diva's home goods.

"As of today, those products are on the floor and online," Paul Rutenis, general merchandise manager of J.C. Penney's home department, said on Monday in testimony in New York State Supreme Court.

A judge ruled earlier this month that J.C. Penney could sell certain Martha Stewart designed goods under the "JCP Everyday" label, at least until an appeal by Macy's is decided. A ruling on the appeal could come as early as this week.

Macy's claims it has the exclusive right to sell Martha Stewart products in the cookware, bedding and bath categories under a contract that runs through 2018.

J.C. Penney decided in September to manufacture the goods under the "JCP Everyday" label after it was barred from selling them under Martha Stewart's name last summer, Rutenis said.

Macy's also is seeking to block J.C. Penney from selling certain goods under the "MarthaCelebrations" label that it says violates the original ban, including a pitcher and champagne flutes.

Rutenis said the company would suffer "substantial harm" during the spring 2013 season if it couldn't sell the already manufactured items. An analyst has estimated the value of the goods at $100 million (65 million pounds).

Last week, J.C. Penney said it had borrowed $850 million from its $1.85 billion revolving credit facility as it revamps following the ouster of Chief Executive Ron Johnson. The company's sales fell 25 percent last year.

Macy's sued after Martha Stewart and J.C. Penney announced a partnership in December 2011. A trial started in February. J.C. Penney and Martha Stewart Living Omnimedia , which also was sued, are presenting witnesses this week.

The cases are Macy's Inc v. Martha Stewart Living Omnimedia Inc, 650297/2012, and Macy's Inc v. J.C. Penney Corp, 652861/2012, New York State Supreme Court, New York County.

(Reporting by Karen Freifeld; Editing by Jilian Mincer and John Wallace)